Post-translational modifications of histones play a key role in DNA-based processes, like transcription, by modulating chromatin structure. N-terminal acetylation is unique among the numerous histone modifications because it is deposited on the N-alpha amino group of the first residue instead of the side-chain of amino acids. The function of this modification and its interplay with other internal histone marks has not been previously addressed. Here, we identified N-terminal acetylation of H4 (N-acH4) as a novel regulator of arginine methylation and chromatin silencing in Saccharomyces cerevisiae. Lack of the H4 N-alpha acetyltransferase (Nat4) activity results specifically in increased deposition of asymmetric dimethylation of histone H4 arginine 3 (H4R3me2a) and in enhanced ribosomal-DNA silencing. Consistent with this, H4 N-terminal acetylation impairs the activity of the Hmt1 methyltransferase towards H4R3 in vitro. Furthermore, combinatorial loss of N-acH4 with internal histone acetylation at lysines 5, 8 and 12 has a synergistic induction of H4R3me2a deposition and rDNA silencing that leads to a severe growth defect. This defect is completely rescued by mutating arginine 3 to lysine (H4R3K), suggesting that abnormal deposition of a single histone modification, H4R3me2a, can impact on cell growth. Notably, the cross-talk between N-acH4 and H4R3me2a, which regulates rDNA silencing, is induced under calorie restriction conditions. Collectively, these findings unveil a molecular and biological function for H4 N-terminal acetylation, identify its interplay with internal histone modifications, and provide general mechanistic implications for N-alpha-terminal acetylation, one of the most common protein modifications in eukaryotes.